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79–436PDF 2012

INNOVATION CORPS: A REVIEW OF A 

NEW NATIONAL SCIENCE FOUNDATION PROGRAM 

TO LEVERAGE RESEARCH INVESTMENTS 

FIELD HEARING 

BEFORE THE

SUBCOMMITTEE ON RESEARCH AND SCIENCE 

EDUCATION 

COMMITTEE ON SCIENCE, SPACE, AND 

TECHNOLOGY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TWELFTH CONGRESS 

SECOND SESSION 

MONDAY, JULY 16, 2012 

Serial No. 112–96 

Printed for the use of the Committee on Science, Space, and Technology 

( 

Available via the World Wide Web: http://science.house.gov 
(II) 

COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY 

HON. RALPH M. HALL, Texas, Chair 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

DANA ROHRABACHER, California 

ROSCOE G. BARTLETT, Maryland 

FRANK D. LUCAS, Oklahoma 

JUDY BIGGERT, Illinois 

W. TODD AKIN, Missouri 

RANDY NEUGEBAUER, Texas 

MICHAEL T. MCCAUL, Texas 

PAUL C. BROUN, Georgia 

SANDY ADAMS, Florida 

BENJAMIN QUAYLE, Arizona 

CHARLES J. ‘‘CHUCK’’ FLEISCHMANN, 

Tennessee 

E. SCOTT RIGELL, Virginia 

STEVEN M. PALAZZO, Mississippi 

MO BROOKS, Alabama 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

CHIP CRAVAACK, Minnesota 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

VACANCY 

EDDIE BERNICE JOHNSON, Texas 

JERRY F. COSTELLO, Illinois 

LYNN C. WOOLSEY, California 

ZOE LOFGREN, California 

BRAD MILLER, North Carolina 

DANIEL LIPINSKI, Illinois 

DONNA F. EDWARDS, Maryland 

BEN R. LUJA ́ N, New Mexico 

PAUL D. TONKO, New York 

JERRY MCNERNEY, California 

TERRI A. SEWELL, Alabama 

FREDERICA S. WILSON, Florida 

HANSEN CLARKE, Michigan 

SUZANNE BONAMICI, Oregon 

VACANCY 

VACANCY 

VACANCY 

SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION

HON. MO BROOKS, Alabama, Chair 

ROSCOE G. BARTLETT, Maryland 

BENJAMIN QUAYLE, Arizona 

STEVEN M. PALAZZO, Mississippi 

ANDY HARRIS, Maryland 

RANDY HULTGREN, Illinois 

LARRY BUCSHON, Indiana 

DAN BENISHEK, Michigan 

RALPH M. HALL, Texas 

DANIEL LIPINSKI, Illinois 

HANSEN CLARKE, Michigan 

TERRI A. SEWELL, Alabama 

SUZANNE BONAMICI, Oregon 

EDDIE BERNICE JOHNSON, Texas 
(III) 

C O N T E N T S 

Monday, July 16, 2012 

Page 

Witness List ............................................................................................................. 2 

Hearing Charter ...................................................................................................... 3 

Opening Statements 

Statement by Representative Mo Brooks, Chairman, Subcommittee on Research and Science Education, Committee on Science, Space, and Technology, U.S. House of Representatives ............................................................... 10 

Written Statement ............................................................................................ 11 

Statement by Representative Daniel Lipinski, Ranking Minority Member, 

Subcommittee on Research and Science Education, Committee on Science, 

Space, and Technology, U.S. House of Representatives .................................... 7 

Written Statement ............................................................................................ 9 

Witnesses: 

Dr. Thomas Peterson, Assistant Director, Directorate for Engineering, National Science Foundation ...................................................................................

Oral Statement ................................................................................................. 13 

Written Statement ............................................................................................ 15 

Mr. Steve Blank, Lecturer, Stanford University and the University of California at Berkeley ................................................................................................

Oral Statement ................................................................................................. 21 

Written Statement ............................................................................................ 23 

Mr. Neil Kane, President, Illinois Partners Executive Services, LLC ................

Oral Statement ................................................................................................. 46 

Written Statement ............................................................................................ 48 

Dr. Gabriel Popescu, Assistant Professor, Department of Electrical and Computer Engineering, University of Illinois at Urbana-Champaign ....................

Oral Statement ................................................................................................. 53 

Written Statement ............................................................................................ 56 

Dr. Andrew Mazar, Director, Program for Developmental Therapeutics and 

Entrepreneur-in-Residence Innovation and New Ventures Office, Northwestern University ...............................................................................................

Oral Statement ................................................................................................. 65 

Written Statement ............................................................................................ 68 

(1) 

INNOVATION CORPS: A REVIEW OF A NEW 

NATIONAL SCIENCE FOUNDATION PROGRAM 

TO LEVERAGE RESEARCH INVESTMENTS 

Monday, July 16, 2012 

U.S. HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON RESEARCH AND SCIENCE EDUCATION, COMMITTEE ON SCIENCE, SPACE, AND TECHNOLOGY, Northwestern University School of Law, Chicago, Illinois 

The Subcommittee met, pursuant to call, at 10:00 a.m., at Lincoln Hall, Levy Mayer 104, 375 East Chicago Avenue, Chicago, Illinois, Hon. Mo Brooks [Chairman of the Subcommittee] presiding. 
2 
3 
4 
5 
6 
7 

Chairman BROOKS. The Subcommittee on Research and Science 

Education will come to order. 

Good morning; welcome to today’s hearing, Innovation Corps and 

review of a new National Science Foundation Program to Leverage 

Research Investments. The purpose of today’s hearing is to examine the new National Science Foundation Innovation Corps program and assess its value to the American taxpayer and potential 

contribution to the Nation’s future prosperity. In front of you are 

packets containing the written testimony, biographies and truth-intestimony disclosures for today’s witnesses. 

Chairman BROOKS. Ranking Member Lipinski, first and foremost, it is a pleasure to join you here in Chicago this morning for 

what will be the first, minority field hearing held by the Science, 

Space and Technology Committee in this Congress. 

This is your hearing, on your turf. The Chair recognizes you first, 

Mr. Lipinski, for an opening statement. 

Mr. LIPINSKI. Thank you, Mr. Chairman, and thank you for waking us up with the gavel this morning. I thank you for coming here 

and, well, first of all, scheduling this hearing in Chicago, traveling 

here to hold it. I didn’t even realize it was the first one that—field 

hearing for the, uh,—for the Democrats. I especially appreciate 

that. I know your time here in Chicago is short, but I hope you 

enjoy your visit as much as I enjoyed my time down in Huntsville 

when I traveled there for our STEM education hearing a couple 

months ago. I’d also like to thank Northwestern for hosting us. I’m 

a proud graduate of Northwestern, and received my Bachelor’s Degree of Mechanical Engineering at Northwestern. Although, it was 

up in Evanston. I actually did get into Northwestern Law School 

and decided not to become an attorney, for whatever that means. 

I know Chairman—Chairman won’t think anything bad about me. 

And, finally, I want to thank our witnesses—— 

Chairman BROOKS. You know, we are in a law school. 

Mr. LIPINSKI. Yeah. I’d like to thank our witnesses for taking the 

time to share your insights and experience with National Science 

Foundation Innovation Corps Program. 

And I would like to thank everyone else who has joined us for 

the hearing. 

Very briefly, I–Corps is an NSF education program which helps 

federally funded research innovations transition from the university lab into a profitable company. It is based on the Lean 

LaunchPad course developed by successful Silicon Valley serial entrepreneur Steve Blank, and essentially applies the scientific method, which is well-known by researchers, to developing a startup. 

I strongly believe that the I–Corps program embodies NSF’s 

original mission of both promoting the progress of science and advancing the national prosperity. Let’s not forget that second part, 

especially when we are looking to maximize the efficiency of our 

federal government. When Vannevar Bush talked about the need 

for a National Science Foundation in 1945, he was concerned about 

getting the U.S. back to full employment. Back then he wrote, ‘‘We 

do not know yet how we shall reach that goal, but it is certain that 

it can be achieved only by releasing the full creative and productive 

energies of the American people.’’ 
8 

More recently, the America COMPETES Act Reauthorization 

that passed last Congress stipulates that the Broader Impacts criterion used in evaluating NSF grant proposals must include the, 

‘‘Increased economic competitiveness of the United States,’’; and, 

‘‘Increased partnerships between academia and industry.’’ Now, as 

Chairman of this Subcommittee at that time, I included those two 

additional components in the bill in order to reinforce the original 

mission of the NSF as we see innovation and the role of our research institutions becoming increasingly critical to job creation. 

We will hear today from our witnesses how educational programs 

like I–Corps fit perfectly into the mission of the NSF. 

Although it’s only about one-quarter of one percent of NSF’s 

budget, I think this program will yield disproportionate benefits. 

By giving scientists who have already been awarded NSF research 

grants the education needed to push their work outside of the ivory 

tower into the marketplace, we are helping turn NSF’s research investments into jobs. I’m encouraged by the many stories I’ve heard 

from awardees in the first and second cohorts, including two of the 

witnesses here today. In May I had the opportunity to sit in on the 

final presentations of the second I–Corps cohort at Stanford. I was 

very impressed, not only by the innovations presented, but also by 

the stories about what the participants learned through the program. 

For anyone who hasn’t looked at this program in depth, it is important to note that we are talking about a stage of commercialization before private sector financing gets involved. The goal of I– 

Corps is to educate scientists, to help them establish the viability 

of an idea before forming a startup. What I am especially excited 

about is not just the promise of the new technologies being explored by the teams fortunate enough to participate in I–Corps, it 

is also the exponential leveraging effect that is already happening. 

I–Corps participants are taking what they have learned and are 

working with their new private sector connections and their university administrators to create opportunities on their own campuses 

to educate students and faculty on the basics of entrepreneurship. 

Many are from institutions in communities and regions without a 

significant record of entrepreneurship. So, they are becoming, in a 

sense, missionaries carrying the best practices of Silicon Valley 

back to their own communities and figuring out how to localize 

these best practices. 

Despite the tremendous promise of the I–Corps program, some of 

my colleagues may be skeptical that this is an appropriate use of 

funds for the National Science Foundation. I explained briefly how 

I see I–Corps fitting into NSF’s core mission, but I welcome all of 

our witnesses today to help us understand how NSF is filling an 

unmet need, and why you believe it’s appropriate for the NSF. I 

also welcome your thoughts on how the I–Corps program can be 

improved. And, finally, I challenge you to share your thoughts on 

what more the private sector and universities themselves can be 

doing in this space. I invited Dr. Mazar to testify about his role as 

an Entrepreneur-in-Residence at Northwestern University. Northwestern is just one of many universities around the country who 

have taken their own initiative and either their own funds or pri-
9 

vate sector donations to bolster entrepreneurial activity on their 

campuses. 

The way I see it, this is not a situation where either universities 

do this on their own, or the private sector does it, or the federal 

government steps in. This is a partnership among all three, and all 

three have a role to play, resources to contribute, and benefits to 

reap. We have good representation here from all of the partners, 

and I look forward to an interesting and thoughtful discussion 

about the new NSF I–Corps program and where we take it from 

here. Once again, I thank all of the witnesses for being here this 

morning and I look forward to your testimony. 

PREPARED STATEMENT OF RANKING MEMBER DANIEL LIPINSKI

Thank you Chairman Brooks for scheduling this hearing in Chicago and traveling 

here to hold it. I know your time here is short, but I hope you enjoy your visit as 

much as I enjoyed my time in Huntsville when I traveled there for our STEM Education hearing. I would also like to thank Northwestern University for hosting us 

here today; I am a proud graduate of Northwestern having received my bachelors 

degree in mechanical engineering. And finally I want to thank our witnesses for taking the time to share with us your insights and experiences with the National 

Science Foundation’s Innovation Corps Program and everyone else who has joined 

us for this hearing. 

Very briefly, I-Corps is an NSF education program which helps federally funded 

research innovations transition from the university lab into a profitable company. 

It is based on the Lean LaunchPad course developed by successful Silicon Valley serial entrepreneur Steve Blank and essentially applies the scientific method—which 

is well-known by researchers—to developing a start-up. 

I strongly believe that the I-Corps program embodies NSF’s original mission of 

both promoting the progress of science and advancing the national prosperity. Let’s 

not forget that second part, especially when we are looking to maximize the efficiency of our federal investments. When Vannevar Bush talked about the need for 

a National Science Foundation in 1945, he was concerned about getting the U.S. 

back to full employment. Back then he wrote, ‘‘[w]e do not know yet how we shall 

reach that goal, but it is certain that it can be achieved only by releasing the full 

creative and productive energies of the American people.’’ More recently, the America COMPETES Act Reauthorization that passed last Congress stipulates that the 

Broader Impacts criterion used in evaluating NSF grant proposals must include the 

‘‘Increased economic competitiveness of the United States’’ and ‘‘Increased partnerships between academia and industry.’’ As chairman of this subcommittee at that 

time, I included those two additional components in the bill in order to reinforce 

the original mission of the NSF as we see innovation and the role of our research 

universities becoming increasingly critical to job creation. We will hear today from 

our witnesses how educational programs like I–Corps fit perfectly into the mission 

of the NSF. 

Although it’s only about one quarter of 1 percent of NSF’s budget, I think this 

program will yield disproportionate benefits. By giving scientists who have already 

been awarded NSF research grants the education needed to push their work outside 

of the ivory tower into the marketplace, we are helping turn NSF’s research investments into jobs. I’m encouraged by the many stories I’ve heard from awardees in 

the first and second cohorts, including two of the witnesses here today. In May I 

had the opportunity to sit in on the final presentations of the second I–Corps cohort 

at Stanford, and I was very impressed not only by the innovations presented, but 

also by the stories about what the participants learned through the program. 

For anyone who hasn’t looked at this program in depth, it is important to note 

that we are talking about a stage of commercialization before private sector financing gets involved. The goal of I-Corps is to educate scientists to help them establish 

the viability of an idea before forming a start-up. What I am especially excited about 

is not just the promise of the technologies being explored by the teams fortunate 

enough to participate in I–Corps. It’s the exponential leveraging effect that is already happening. I-Corps participants are taking what they have learned and are 

working with their new private sector connections and their university administrators to create opportunities on their own campuses to educate students and faculty 

on the basics of entrepreneurship. Many are from institutions in communities and 

regions without a significant record of entrepreneurship. So they are becoming, in 
10 

a sense, missionaries carrying the best practices of Silicon Valley back to their own 

communities and figuring out how to localize these best practices. 

Despite the tremendous promise of the I–Corps program, some of my colleagues 

may be skeptical that this is an appropriate use of funds for the National Science 

Foundation. I explained briefly how I see I–Corps fitting into NSF’s core mission, 

but I welcome all of the witnesses today to help us understand how NSF is filling 

an unmet need, and why you believe it is appropriate for NSF. I also welcome your 

thoughts on how the I-Corps program can be improved. And finally, I challenge you 

to share your thoughts on what more the private sector and universities themselves 

can be doing in this space. I invited Dr. Mazar to testify about his role as an Entrepreneur-in-Residence at Northwestern University. Northwestern is just one of many 

universities around the country who have taken their own initiative and either their 

own funds or private sector donations to bolster entrepreneurial activity on their 

campuses. 

The way I see it, this is not a situation where either universities do this on their 

own, or the private sector does it, or the federal government steps in. This is a partnership among all three, and all three have a role to play, resources to contribute, 

and benefits to reap. We have good representation here from all of the partners, and 

I look forward to an interesting and thoughtful discussion about the new NSF ICorps program and where we take it from here. Once again I thank all of the witnesses for being here this morning and I look forward to your testimony. 

Chairman BROOKS. Thank you, Mr. Lipinski. I now recognize myself for five minutes for an opening statement. 

The National Science Foundation funds basic research, which is 

oftentimes too costly and too risky for industry alone to undertake, 

but has many times proven to be groundbreaking and economic 

successes in the end. For example, current nanotechnology initiatives marked by a transformative technology which allows scientists to manipulate matter at the atomic and molecular levels, 

was preceded by scientists funded by NSF who were learning how 

to detect activity at the scale of individual atoms. Now, companies 

are making plans to utilize this pioneering technology to produce 

nanoscale products which will enter the marketplace. 

I could list other examples, but I think my point is clear; that 

NSF has contributed to America’s economy and competitiveness in 

invaluable ways. Unfortunately, today the United States faces 

unsustainable budget deficits which limit the spending in Congress, and what it is able to appropriate. While I am thankful to 

chair a Subcommittee which oversees such important research and 

development activities, it is the role and responsibility of Congress 

to work to prevent overspending, ensure that federally funded programs do not impede the work of the private sector, and provide 

the best return on the taxpayer dollar. The question we must address is which activities fall under this purview. 

NSF created a new Innovation Corps program, I–Corps, to assess 

the readiness of emerging technological concepts for transitioning 

into new products through a public-private partnership. According 

to NSF, the program will, ‘‘bring together the technological, entrepreneurial, and business know-how to bring discoveries ripe for innovation out of the university lab,’’; and, ’’increase the number of 

entrepreneurs emerging from university laboratories.’’ 

While this certainly sounds like a worthwhile endeavor, I have 

a number of questions, including the degree to which the federal 

government should determine which companies succeed and which 

fail, which are entitled to I–Corps assistance and which are not, 

but, if so, whether it is appropriate for this kind of decision-making 

to be made by an agency whose primary mission is basic research, 

at a time when businesses are struggling to compete with big gov-
11 

ernment, and funding is already scarce, and at a time when there 

are already a number of questions arising over the federal government picking commercial winners and losers. 

And rather badly, I might add, in the case of Solyndra, roughly 

a 535-million-dollar cost to the United States taxpayer; Abound 

Solar, potentially a 400-million-dollar loss to U.S. taxpayers, who 

went bankrupt after receiving 70 million dollars from U.S. taxpayers; and Beacon Power, nearly a 70-million-dollar cost to U.S. 

taxpayers, 43 million in Department of Energy loan guarantees, 

and more than 25 million in other Department of Energy grants. 

I need to better understand how and why NSF is best equipped to 

make these similar types of decisions for university research. 

I look forward to hearing from our witnesses today, to working 

with my colleagues, to further explore I–Corps and determine its 

viability as a program funded by taxpayer dollars. 

PREPARED STATEMENT OF CHAIRMAN MO BROOKS

The National Science Foundation funds basic research which is oftentimes too 

costly and too risky for industry alone to undertake, but has many times proven to 

be groundbreaking and economic successes in the end. For example, current nanotechnology initiatives, marked by a transformative technology which allows scientists to manipulate matter at the atomic and molecular levels, was preceded by 

scientists funded by NSF who were learning how to detect activity at the scale of 

individual atoms. Now, companies are making plans to utilize this pioneering technology to produce nanoscale products which will enter the marketplace. 

I could list more examples, but I think my point is clear—that NSF has contributed to America’s economy and competitiveness in invaluable ways. Unfortunately, 

today the United States faces unsustainable budget deficits which limit the spending Congress is able to appropriate. While I am proud to Chair a Subcommittee 

which oversees such important research and development activities, it is the role 

and responsibility of Congress to work to prevent overspending, ensure that federally funded programs do not impede the work of the private sector and provide the 

best return on the taxpayer dollar. The question that we must address is which activities fall under this purview. 

NSF created a new Innovation Corps program (I–Corps) to assess the readiness 

of emerging technology concepts for transitioning into new products through a public-private partnership. According to NSF, the program will ‘‘bring together the technological, entrepreneurial, and business know-how to bring discoveries ripe for innovation out of the university lab’’ and ‘‘increase the number of entrepreneurs emerging from university laboratories.’’ While this certainly sounds like a worthwhile endeavor, I have a number of questions, including the degree to which the federal government should determine which companies succeed and which fail, but, if so, 

whether it is appropriate for this kind of decision-making to be made by an agency 

whose primary mission is basic research. At a time when businesses are struggling 

to compete with big government and funding is already scarce, and at a time when 

there are already a number of questions arising over the federal government picking 

commercial winners and losers—and rather badly I might add in the case of 

Solyndra, Abound Solar, and Beacon Power—I need to better understand how and 

why NSF is best equipped to make these similar types of decisions for university 

research. 

I look forward to hearing from our witnesses today and to working with my colleagues to further explore I–Corps and determine its viability as a program funded 

by valuable taxpayer dollars. 

If there are other Members who wish to submit additional opening statements, your statements will be added to the record at this 

point. I know we have an audience here, Congressman Lipinski 

and I are the only two Members who are here today. We have a 

good number of others who are Members of the Subcommittee, and 

at this point, that is when they would be permitted to offer statements. 
12 

At this point, I yield to Mr. Lipinski to introduce our witnesses. 

Mr. LIPINSKI. I thank the Chairman, especially thank you for the 

opportunity to do this, to let me go first in opening statement and 

to introduce our witnesses. I’m not used to that, after, you know, 

being the minority. So, thank you, I appreciate that. 

Dr. Tom Peterson is Assistant Director of the National Science 

Foundation Directorate for Engineering. Prior to joining the NSF, 

he served on a faculty at the University of Arizona, beginning in 

1977, serving as head of the Chemical and Environmental Engineering Department from 1990 to 1998, and as dean from 1998 

until 2009. Good to have you, Dr. Peterson. 

Next we have Steve Blank. Steve Blank is currently a Consulting 

Associate Professor at Stanford University, and adjunct at U.C. 

Berkeley Haas Business School. In 21 years as a Silicon Valley entrepreneur he created eight companies in various computer-related 

fields. So, a serial entrepreneur for those familiar with the term. 

Although he formally retired in 1999, he became very busy as an 

educator, teaching courses at Stanford, U.C. Berkeley and Columbia. During this time he developed the Lean LaunchPad course 

NSF uses for the Innovation Corps Program. And I want to add 

that Steve waited, he had his plane delayed for three, four hours 

last night; they cancelled it; he drove all the way from Richmond, 

Virginia, to Dulles last night to take a six a.m. flight, which was 

then cancelled. From there he went to Washington Reagan National to get out here. So, I especially appreciate all the effort that 

he’s gone through to be here today. 

Next we have Neil Kane. Neil Kane is the President and founder 

of Illinois Partners Executive Services. Most recently he was the 

CEO with Advanced Diamond Technologies, a company he cofounded in 2003, by licensed technology at Argonne National Lab. 

Mr. Kane is a former co-Executive Director of the Illinois Technology Enterprise Center at Argonne. He was Entrepreneur-in-Residence at the Research Park at the University of Illinois at UrbanaChampaign. Good to have you. 

Next we have Gabriel Popescu. Dr. Gabriel Popescu is an Assistant Professor in the Department of Electrical and Computer Engineering, University of Illinois at Urbana-Champaign, and holds a 

full-faculty appointment with the Beckman Institute for Advanced 

Science and Technology. Before joining the UIUC faculty in 2007, 

Dr. Popescu received a Ph.D. in optics in 2002, from the University 

of Central Florida. Dr. Popescu received an I–Corps grant earlier 

this year for quantitative phase imaging solutions, for materials in 

life sciences. Good to have you, Dr. Popescu. And I have to say that 

as it came down to going—between Northwestern and Illinois to go 

to undergraduate engineering, and I chose Northwestern, but 

mainly, probably that it’s closer to home. No, it’s a great university, 

University of Illinois. 

And, finally, we have Dr. Andrew Mazar, who serves as the Entrepreneur-in-Residence and the Managing Director for the Center 

for Developmental Therapeutics in the Chemistry of Life Processes 

Institute at Northwestern University. He has spent 23 years working on drug discovery, development and commercialization at the 

interface of academia and industry. Dr. Mazar is a member of sev-
13 

eral cancer journal editorial boards and has published over 90 papers in peer-reviewed journals. Good to have you, Dr. Mazar. 

Now, this next line, I think the Chairman—did you tell them 

how much time they have. 

Chairman BROOKS. Ah, there it is. 

As our witnesses should know, spoken testimony is limited to 

five minutes, after which the Members of the Subcommittee will 

have five minutes each to ask questions. 

I now recognize our first witness, Dr. Peterson, for five minutes. 

STATEMENT OF DR. THOMAS PETERSON, 

ASSISTANT DIRECTOR FOR ENGINEERING, 

NATIONAL SCIENCE FOUNDATION 

Dr. PETERSON. Chairman Brooks. Ranking Member Lipinski. 

Thank you for inviting me to participate in this field hearing focusing on NSF’s Innovation Corps, or I–Corps. I’m very pleased to 

have the opportunity to discuss this very exciting program with 

you. 

NSF is recognized and respected worldwide for identifying and 

supporting fundamental research and education in science and engineering, through a peer-review evaluation of the merits of the 

ideas that are proposed. That process, both by definition and by 

construction, selects the best and most creative ideas, those that 

offer the greatest promise for success. We invest more than seven 

billion dollars annually in these efforts. Our grantees are the winners in this process, but so, too, are the taxpayers who have invested in this research through the NSF. 

I–Corps has as its genesis many of the foundation’s long-standing 

innovation ecosystem programs. Those existing NSF innovation research alliances include consortia, such as the Engineering Research Centers, the Industry University Cooperative Research Centers, and the Science and Technology Centers, as well as the Academic Liaison with Industry program, and of course the Small 

Business Innovation Research program. These programs complement our other significant investments in fundamental science 

and engineering research by offering multiple pathways to moving 

discovery to innovative technologies. 

Many of these programs have been in the NSF portfolio for decades. For example, the SBIR program is a government-wide program that was initiated at NSF in the early ’80s. The Centers programs that I mentioned all began at NSF in the late 1980s. 

To build a national culture of innovation we need not only sustained research investment, but also skillful and deliberate catalysts to hasten the application of scientific discoveries. A robust innovation ecosystem also helps conceive novel research questions, 

and it shifts the science and engineering knowledge paradigms altogether. That, in effect, is what we seek to accomplish through the 

Innovation Corps program. 

The goals of I–Corps are as follows: First, to build on NSF’s investment in fundamental research; second, to offer academic researchers and students an opportunity to learn firsthand about 

technological innovation and entrepreneurship, and thereby fulfill 

the promise of their discoveries; and third, to prepare students for 

real-world experience through curricular enhancements, and pro-
14 

vide them with opportunities to learn about and participate in the 

process of transforming scientific and engineering discoveries to 

meet societal needs. 

We accomplish these goals in I–Corps by providing three elements. Namely, financial support to the teams to assist the development of a prototype or a proof of concept; a specific structure for 

the I–Corps team, comprised of a principal investigator, an entrepreneurial lead, and an innovation/entrepreneurial mentor; and finally, a strong education component focusing on a hypothesis-driven approach to developing a methodology for evaluating both the 

technical merits, as well as the marketability of the concept that’s 

being proposed. 

Every directorate in NSF participates in I–Corps. The structure 

of I–Corps mirrors the NSF Director’s vision of OneNSF, working 

together seamlessly in well-integrated and efficient ways across organizational and disciplinary boundaries. 

Teams that advanced their efforts towards commercializing technologies were facilitated by inclusion of public and private sector 

experts to provide guidance by participation in tailored curriculum 

and by funds to evaluate the commercial readiness of technology 

ideas. Some exciting new technologies that have emerged from the 

first I–Corps cohorts include photocatalysis to help clean up contaminated water, a new technology for semiconductor-based hydrogen and hydrocarbon sensors, and production of graphene film. 

I–Corps presents a new model for public-private partnerships 

that leverages our significant investment in basic research with 

relatively smaller I–Corps funding, thus offering a bigger bang for 

the buck. 

In the first two cohorts over 4,000 discussions took place between 

I–Corps teams and potential partners, customers and stakeholders. 

As of today there a total of 100 teams, and there are 100 mentors 

that joined these teams, plus over 70 additional mentors who have 

been identified as already willing to join other teams. 

In summary, the I–Corps program has been a significant, positive addition to the NSF investment portfolio, even though it constitutes less than one-third of one percent of the NSF budget. For 

those teams who have participated, it has been truly transformational to thinking in a more entrepreneurial way. An enormous and significantly underutilized storehouse of creative ideas 

with potential economic benefit exists in our nation’s colleges and 

universities, and I–Corps is simply a way to help unlock and unleash some of those ideas generated by current and previous NSF 

investments. 

I thank the Committee for their interest in this exciting program, 

and for giving me the opportunity and the privilege to come here 

today to tell you about it. I’d be happy to answer any questions. 

[The prepared statement of Dr. Peterson follows:] 
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Chairman BROOKS. Thank you, Dr. Peterson. 

I now recognize our second witness, Mr. Blank, for five minutes. 

STATEMENT OF MR. STEVE BLANK, LECTURER, 

STANFORD UNIVERSITY AND 

THE UNIVERSITY OF CALIFORNIA AT BERKELEY 

Mr. BLANK. Thank you, Chairman Brooks and Ranking Member 

Lipinski; and thank you for the opportunity to discuss the National 

Science Foundation Innovation Corps. And I hope to address Chairman Brooks’ questions directly, because I think they’re appropriate 

questions for the country, given the set economic climate. 

I just have to note that, in volunteering my services to the National Science Foundation, my career has gone full circle. I started 

my government service volunteering for my country during Vietnam for four years in the air force, with a year and a half in Southeast Asia. So, I’m glad to be doing this type of government service 

again. 

I think Dr. Peterson described the role of the Innovation Corps 

and the SBIR and STTR program. But it’s just important to note 

that what we have here is an education program that bridges the 

basic research that this Committee authorizes the NSF to do, and 

commercialization that we fund through the SBIR and STTR program. For 30 years we’ve been writing checks, but not having any 

educational process to assure that the recipients of those checks actually understood how to take best advantage of those scholars. 

The Innovation Corps is the first successful STEM education program to bridge this gap between NSF-funded researchers who want 

to commercialize their technology and the needs of private capital. 

The data from the first 50 teams show the effectiveness of this program. 

By the way, there’s been two other key consequences, completely 

unexpected, that we had no idea would happen. The first has been 

the leveraging effect, as these Principal Investigators went back to 

their own universities and took this methodology and actually 

started teaching it to their own students in their own universities. 

And the second, I think important for this Committee and this 

Congress, is the effect and the applicability of this program to 

small business innovation and job creation on ‘‘Main Street’’, as 

well as in technology startups. That is, the same process can be 

used for the other 99 percent of businesses in the United States, 

not just for technology startups. 

So, what’s new about the Innovation Corps? We now know that 

startups are not smaller versions of large companies. 

In fact, we now know that researchers who used to believe that 

the entire company was about their idea, is now learning that their 

idea and their technology is just one small piece of all the things 

they need to know about how to build a successful venture. They 

need to know—to understand customers, they need to understand 

pricings, they need to understand distribution channels. None of 

those things are visible inside the laboratory. 

And so, what the class is about, this education program, is getting these scientists and engineers out of their labs, for some of 

them the first time in 20 years since they’ve seen daylight. And, 

actually, having them talk to people they’ve never talked to in their 
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entire lives. An average team talks to a hundred customers in eight 

weeks. A hundred. Let me tell you, if Solyndra was doing that, we 

wouldn’t have been writing these checks. 

Now, in fact, if we were looking for a program to avoid waste in 

the United States, this is the program to do that. And it’s a uniquely American program. Because we’ve talked about hypothesis testing, we’ve talked about how scientists understand how to test hypothesis, but we sometimes forget that in America we don’t punish 

failure, we actually understand that failure is part of the scientific 

method. 

But we actually now teach the same in getting out of the building and talking to customers, and we now understand that when 

this wasn’t the right customer, it’s okay to now inexpensively look 

over here. If this wasn’t the right pricing, look over here. If these 

aren’t the right features, look over here. And it’s only in the United 

States that we actually are able to take these risks and integrate 

quickly. 

The last thing I want to mention is why is this program necessary. And I think a lot of this discussion is about a fallacy of the 

role of private capital. I think you know I taught this class from 

day one with venture capitalists sitting in the class as instruction. 

We brought private capital in on day one. And their take was the 

same as mine, none of these guys were fundable at all. They 

weren’t. It was great science, great technology, great whatever, but 

they didn’t have a clue about the business. It’s not the role of private capital to actually go identify where the technology fits. It’s 

actually the role of the technologist to get out of the building, have 

some discussions, and take the business to the next step so they 

can present it to private capital. And that’s what this class has 

been doing. 

I–Corps is an educational program that’s a bridge to private capital, not as a replacement. And I think, I’m proud to say, that a 

lot of these teams will get funded by private capital, only because 

they’ve been through this class. 

The other comment that I just want to make is picking winners 

and losers. As I said, this doesn’t replace private capital with government’s funds. Its goal is to get research in the country that 

we’ve already paid for, to a point where a team can attract private 

capital in the shortest period of time. 

Now, I’m happy to take questions. And I just should, would like 

to close, that I think the results were pretty spectacular, and I’m 

just proud to have been part of it. 

What we’ve seen is a government program designed, built, and 

tested and scaled within a year. Amazing. This is like the early 

days of NASA. With just one-quarter of one percent we’ve leveraged the country’s entrepreneur commitment to research, its partnership of private capital, and its tolerance for failure in a uniquely 

American way. It’s an extraordinarily efficient use of taxpayer 

money, and it will pay us back with jobs and a competitive edge 

on a global scale. Thank you. 

[The prepared statement of Mr. Blank follows:] 
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Chairman BROOKS. Thank you, Mr. Blank. And thank you for 

your extraordinary efforts to get here. 

The Chair next recognizes our third witness, Mr. Kane, for five 

minutes. 

STATEMENT OF MR. NEIL KANE, PRESIDENT, 

ILLINOIS PARTNERS EXECUTIVE SERVICES, LLC 

Mr. KANE. Chairman Brooks, thank you; I’d also like to thank 

Ranking Member Lipinski and the other Members of the Committee for the opportunity to speak here today. I’m the token mentor on the panel, and the team that I mentored was in the first I– 

Corps cohort, and we attended Steve’s class at Stanford in the fall 

of 2011. 

I’m a serial entrepreneur, and I’ve spent the last 12 years helping professors and researchers commercialize their research. I’ve 

been involved in eight university spinoffs, and in five of them I was 

the CEO. Along the way I’ve encountered every small business and 

tech transfer issue there is. I’ve also developed a deep appreciation 

for the role that NSF can play in helping to get these companies 

down the runway and airborne. 

Shortly after the I–Corps program was announced last summer, 

Professor Yi Lu from the University of Illinois asked me to be a 

mentor to his team. He had just published a paper on an innovative method for turning a personal glucose meter, the kind that 

diabetics use, like this, into a general purpose point of care medical 

diagnostic device that could be used to detect viruses, toxins and 

infectious diseases. And for any of you who’d like to have your 

blood glucose checked today, I’d be happy to oblige. While the 

science is exceptionally innovative and creative, the I–Corps program would allow us to deal with the challenge of figuring out how 

to bring it to market. 

The goal of I–Corps is not to make entrepreneurs out of professors. The curriculum allows academics to develop an awareness 

and appreciation for what elements need to be present for innovation to have a chance to succeed in the market. It is more often 

poor market fit, in my opinion, rather than poor technology, which 

causes startups to fail. People who have never commercialized technology always underestimate the time and effort required. A startup is a perpetual open-book test where you’re not graded on a 

curve. Its challenge is academics, because for the first time in 

many of their careers being the smartest person in the room does 

not guarantee success. 

When technology has an obvious need, like a cure for cancer, arguably I–Corps is not needed. This falls into the category of, ‘‘If I 

build it, they will come.’’ Instead, the purpose of I–Corps is to answer the question, ‘‘If I build it, will they come?’’ NSF’s other traditional programs address the question, ‘‘Can I do it.’’ 

I–Corps is a teaching program with a considerable amount of 

skills transfer that will increase the effectiveness of research programs when measured on commercial impact. 

I am currently also working on another startup, this one at 

Northwestern University, and even though that project did not go 

through I–Corps, like any good disciple, I have brought teachings 

to that project. There’s a lot of leverage now that you have a wave 
47 

of mentors who have been trained in this methodology. And I have 

passed the torch to several Kellogg MBA students, one of whom 

has his own startup. 

Based on our experience with I–Corps, we formed a company in 

Champaign called GlucoSentient, and I became the founding CEO. 

We got a Phase I SBIR from NSF, which is critical toward our ability to translate the technology from the university setting into the 

commercial world. A few months ago our company was not venture 

ready. We hope it will be after the SBIR is done. Several of the 

graduate students who worked on the technology in their research 

programs at the university will have full-time jobs in the company 

to continue its development. 

Entrepreneurship is the link between scientific innovation and 

economic development. I’m going to repeat that. Entrepreneurship 

is the link between scientific innovation and economic development. 

Instead of discouraging I–Corps, Congress should encourage it. It’s 

a low-cost program that adds fuel to NSF’s research mission. I– 

Corps will pay a handsome return some day for taxpayers with job 

creation and wealth building, not to mention enhancing the global 

competitiveness in the United States. 

When I was an undergraduate engineering student at the University of Illinois in Champaign, there was no entrepreneurship 

curriculum. Basic business courses, like marketing and finance 

were taught in the business school so far across campus from the 

engineering quad that we couldn’t have taken courses there even 

if we had wanted to. Today it’s cool for engineers, scientists and 

programmers to become entrepreneurs and learn business skills. 

The dislocations in the economy over the past few years have 

taught us that even STEM students need business skills to succeed 

professionally. I–Corps helps prepare a new generation of researchers for the realities of today’s economy, regardless of whether they 

become entrepreneurs or not. The professors who go through the 

program develop a deeper appreciation for the relevance of their research, which improves their ongoing effectiveness. And NSF is investing in a network of mentors who can help to materially move 

the needle in improving the outcomes of the commercial entities 

that become the stewards of the NSF-funded research. 

Thank you. 

[The prepared statement of Mr. Kane follows:] 
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Chairman BROOKS. Thank you, Mr. Kane. 

The Chair now recognizes our fourth witness, and I hope I pronounce this correctly, if I don’t please correct me. 

Mr. Popescu, for five minutes. 

STATEMENT OF DR. GABRIEL POPESCU, 

ASSISTANT PROFESSOR, DEPARTMENT OF ELECTRICAL 

AND COMPUTER ENGINEERING, 

UNIVERSITY OF ILLINOIS AT URBANA-CHAMPAIGN 

Dr. POPESCU. I’d like to thank Chairman Brooks and Ranking 

Member Lipinski for inviting me to share my views on the NSF I– 

Corps program. 

I am an Assistant Professor in the Department of Electrical Engineering at University of Illinois. Since an undergrad, I have been 

studying optics and lasers and their applications in biomedicine. 

I’m a believer in the fact that technology can not only generate 

high-quality health care, but can also help reduce its cost and, you 

know, help access to health care. 

Engineering the tools for scientific discovery has been named by 

National Journal of Engineering as one of the 14 grand engineering 

challenges for the 21st Century. My laboratory develops the next 

generation of light microscope, that will help understand how cells 

and tissue function in both health and disease. Therefore, my research has three components: Technology development, basic 

science studies, and clinical application. Our technology has the potential to generate early and accurate diagnosis, new cures for devastating diseases, inexpensive blood testing for global care, and can 

generate billions of dollars in wealth across several different markets. Like in vitro diagnosis, biotech energy in my department. 

Our research community, many of my peers asking whether they 

can purchase an instrument from some company. This made me realize a tremendous challenge, one that I was not well prepared to 

overcome. And that was, how do we go like this to a successful 

product that can be made available to all. 

I participated in the I–Corps program as the PI for our team Phi 

Optics. Our participation in the I–Corps program has made a serious impact in our understanding of the commercialization process 

and the potential for success of our company. With the knowledge 

gathered during the program, and the adjustments we brought to 

the business model, we’re now rounding up $400,000 in seed investment. We have commitments from a local venture firm and a 

major investor, which they both come up with a hundred thousand, 

each. 

Recently, Phi Optics received the first order for the alpha-prototype of our microscope from a major life sciences company. The prototype will help gather internal interest for potentially investing 

more money in our company. This fall we will be visited by a world 

leading microscopy company, interested to partner and co-develop 

our technology into commercial products. Therefore, we are very 

confident about the outcome of our efforts. And much of this confidence can be traced back to the intense work during the I–Corps 

program. 

Let me just tell you a few specific things about my experience as 

a I–Corps awardee. As a PI I’ve learned a great deal during the 
54 

program. For example, I learned that features of our technology are 

not synonymous with value proposition. And thank you for that. 

Our team learned that we must develop a clear and compelling 

value proposition in order to gain traction from customers. 

Business models need to be flexible and allow for pivoting. Invariably, information will be gathered along the way that directs 

a startup to change strategy and business approach. For example, 

our team ended up with two different business models depending 

on whether we team up with a strategic partner, like a large corporation, or not. 

Interacting with a hundred potential customers is an incredibly 

valuable experience, the results of which cannot be replicated in 

any other way. Prior to attending the program, I did not have a 

good appreciation of the two fundamental tasks in starting a business. Which is business model development and customer development. 

The striking feature, to me, of this program, is that it offers a 

scientific approach to commercialization. Through interactions with 

potential customers, we have the opportunity to test certain hypothesis. For example, what is the proper set of features that our 

instrument should have, first; and what is the cost. This is precisely our research approach in the laboratory, where, in order to 

understand a certain phenomenon, we perform experimental validation of our various hypotheses. 

Personally, I would like to see the I–Corps program expanded locally, if possible, on campuses throughout the country. As an alumnus, I will be very happy to help train new teams at University of 

Illinois. 

In terms of the objectives and achievements of the I–Corps program my opinion is that it will be a very effective use of federal 

dollars. It combines several key elements to produce a highly catalytic environment for the launch of technology startups. Number 

one, top-notch entrepreneurial education from experienced, world 

leading instructors. 

Two, significant interaction with potential users and customers 

of technology. We—particularly, we talked to 105 different people. 

Maximum accountability to the teaching team and program 

peers. This combination of elements makes the I–Corps quite 

unique among federal programs, and should increase the odds of 

commercial success of the program participants. 

Speaking on behalf of the Phi Optics team, I believe the program 

objectives were achieved. 

Seems like I have run out of time, but I would like to say one 

thing about the benefits to the taxpayer. And that is, for decades 

NSF has been investing large amounts of funding in basic science, 

which continuously pushed the frontiers of our knowledge. The 

SBIR/STTR has helped commercializing some of the technology developed through this research. I do believe that the I–Corps program is an extremely useful pre-SBIR tool for training the startup 

teams and helping them validate the true potential for their commercialization. As large industry looks to academia and small businesses, including spin-out companies, to fill product portfolios and 

identify new tools for efficiency, the I–Corps program can act as a 

catalyzer and enhance the probability of commercial success. 
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The taxpayers receive a huge return from their investment. 

These programs provide an opportunity to validate the commercial 

potential before significant investments from federal and private 

sources are committed. 

In essence, the probability of success for the projects going forward is maximized, while the losses due to the projects unlikely to 

succeed are minimized. 

With that, I will close. Thank you very much. 

[The prepared statement of Dr. Popescu follows:] 
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Chairman BROOKS. Thank you, Dr. Popescu. 

I now recognize our final witness, Dr. Mazar, for five minutes. 

STATEMENT OF DR. ANDREW MAZAR, DIRECTOR, 

PROGRAM FOR DEVELOPMENTAL THERAPEUTICS AND 

ENTREPRENEUR-IN-RESIDENCE INNOVATION AND 

NEW VENTURES OFFICE, NORTHWESTERN UNIVERSITY 

Dr. MAZAR. Thank you, Chairman Brooks and Ranking Member 

Lipinski, for the opportunity to testify today. Northwestern University and I appreciate your interest and support for science and 

technology issues. My name is Andrew Mazar, I’m the Director of 

the Center for Developmental Therapeutics at Northwestern, and 

also the Entrepreneur-in-Residence. My perspective that will be a 

little bit different today, it’s not from the NSF perspective, I’m coming from the perspective of therapeutics development. 

But I think a lot of the challenges that I’m discussing are applicable, also, to the I–Corps program, and we all face a similar challenge with trying to commercialize bipartisan into technology. 

So, today, as I said, I’m representing the perspective of the Entrepreneur-in-Residence, or EIR. Northwestern created this position within the Chemistry of Life Processes Institute, also referred 

to as CLP, to address the unique challenges encountered when advancing novel therapeutic projects through development in an academic setting. 

A critical component of this mission is the capacity to move discoveries from the laboratory bench into the hands of society, which 

is facilitated by the EIR position, which works in tandem with 

Northwestern’s Innovation and New Venture Office, also referred 

to as INVO. So, this is our next generation of transfer, but it’s 

much more than that, and really focused on commercialization aspects of our technologies. 

As the EIR, I partner and collaborate on many different projects 

with faculty members across all the different Northwestern schools. 

In this role I have now helped found seven companies over the past 

couple years, and also founded the Center for Developmental 

Therapeutics, which provides actual hands-on assistance with the 

development of new therapeutic projects, both of them in the scientific development side, as well as the commercialization and 

fundraising side. 

So, my EIR position was the first of its kind created at Northwestern, although there have been additional EIR positions created 

across the university since then. 

I believe that the collaborative interaction that I enjoy with 

INVO has also been spurred on by the success of Lyrica, which is 

a drug marketed by Pfizer that was invented at Northwestern, and 

really a tremendous success story with the University. Lyrica is a 

tremendous example of leveraging the federal investment in basic 

research to develop a new drug that is benefiting millions of people, 

as well as generating a revenue stream for Northwestern that is 

being re-invested to create new programs. This type of royalty 

stream and re-investment by the university is especially important 

in today’s challenging funding environment as it provides a complementary source of capital that can be used to build transformative and constructive programs in the academic setting, such 
66 

as CLP and the EIR, something that is not always possible through 

traditional grant mechanisms. 

Further, I believe that the success of Lyrica has bolstered what 

was already a very entrepreneurial culture for Northwestern, and 

taken it mainstream across the entire campus. The number of people thinking about their research in terms of translation and commercialization has grown exponentially since the EIR was put in 

place. 

Let me now speak to the challenges. One of my major challenges 

has been overcoming the perception that discovering and developing new drugs is somehow inferior to more basic knowledge-generating research. I believe that academic drug discovery and development is one of academia’s most important missions. Drug development creates new knowledge and technology for every new product that is developed, and new models for collaborative research 

across departments and schools involving multiple investigators. 

Further, drug discovery and development is highly entrepreneurial, 

and is, therefore, consistent with the entrepreneurial nature to 

which most universities aspire. 

Finally, commercialization of new therapeutics helps the U.S. 

grow its economy and maintains its global competitiveness. 

Another major challenge is funding. I believe that it is possible 

to discover and develop new drugs in the academic setting, and 

that large research-driven institutions with medical schools, such 

as Northwestern, could become quite good at this if funding was 

available. Today we do not have a fund that can provide the capital 

required for these types of activities. 

A few academic institutions have been able to raise small gap 

funds, usually through philanthropy, but in most cases these have 

not provided adequate resources to really move projects forward. 

However, several examples of gap funds, Michigan and Harvard, 

that were allowed to invest sufficient capital in promising projects 

do exist, where returns on investment have already been observed 

within a few years after the initial investment was made. Thus, I 

believe the gap-funding model to support commercialization will 

work if utilized properly. 

I believe that the I–Corps program, from what I understand, is 

trying to do exactly this, and it should be expanded. Without programs like I–Corps the basic research investment will be wasted. 

If gap funding is not available and if venture capital is no longer 

investing in early-stage projects, which it is not, then basic research ends up sitting on a shelf in the tech transfer office. 

The most important thing I’d like to see from the I–Corps program is to make more funds available for each project. Each project 

should be evaluated for what milestone or inflection needs to be 

met next, and sufficient capital should be provided to support this. 

The milestones may be scientific, commercial, or a combination of 

the two, but providing insufficient funds is as bad as providing no 

funds at all. 

Given that there are limits on how much money is available for 

this program, I would favor making a larger meaningful bet, rather 

than trying to fund as many projects as possible and none of them 

moving forward. And it’s not to say that the federal government 

should bear the costs of these types of programs alone. It is pos-
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sible to leverage the federal investment with private funding, and, 

in fact, the federal investment can be viewed as a de-risking strategy that attracts private funding that would not otherwise be available. The I–Corps program is already doing something like this by 

requiring identification of potential customers for each technology 

funded, and I believe that if I–Corps funding is increased, this approach can be expanded to seek out actual commitments of funds 

that can match or exceed the government investment. This drastically lowers the barriers for entry into commercialization, and in 

my opinion, spurs entrepreneurship and economic growth. 

Mr. Chairman, thank you for providing me an opportunity to provide testimony at this field hearing on the Innovation Corps. This 

concludes my remarks. I would be happy to answer questions. 

[The prepared statement of Dr. Mazar follows:] 
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Chairman BROOKS. Thank you, Dr. Mazar. 

Just that everyone will understand, we have your submitted testimonies; they’re much more extensive than, of course, what you 

were able to deliver in a five-minute span, so we appreciate you 

abiding by our time limitation, but know that the full remarks will 

be a part of the hearing record. 

At this point, we go into the questioning segment by Members 

of the Committee. Normally, we have a five-minute limitation, too. 

But under the circumstances, the time that’s been allotted for the 

hearing, I’m going to be somewhat liberal in the amount of time 

that’s allowed for myself and Mr. Lipinski. And, again, since this 

is Mr. Lipinski’s home court, I recognize Mr. Lipinski first. 

Mr. LIPINSKI. Thank you, Mr. Chairman. And I’ll try to keep it 

close to five minutes, then you can go, we can have a—each have 

second round, maybe the best way to go through this. Probably the 

first thing I need to do is hold up my I–Corps cup, that maybe the 

camera is not on me, promoting I–Corps and now that the camera 

is coming around. 

But not paid for with taxpayer dollars, I was assured. 

I just want to say, I was at the—this morning I spoke to a—the 

local chamber of commerce. West Suburban Chamber of Commerce. 

And they had one question. And I think most American’s question 

right now, even if they’re not directed at anything, is, What’s the 

future of our country? Where are the jobs going to come from? 

We’re in this—we’re in a deep hole that we’re slowly getting out 

of, but too slowly getting. What’s the future of employment going 

to be? And I think the future is largely going to come from American innovation. And that’s why I think programs such as I–Corps 

are critically important. We have here in the Chicago area great research universities, we have National Labs. They’re doing great 

work. And we need to do a better job of taking that research, those 

discoveries—and not everything can be turned into a product, I’m 

not claiming that, but those that can, getting that into the market 

and providing jobs here in America. So, that’s—I think that’s the 

number one thing, the number-one question that really is on everyone’s mind. We’ve heard—we’re hearing—I wish we were hearing 

more about innovation and the role innovation plays in that—and 

needs to play for our country. 

I want to—first I have a question that I think Dr. Peterson and 

Mr. Blank would be best to address but some of the other witnesses 

may want to jump in. Some of the witnesses offered thoughts on 

how the program can continue to be improved and/or expanded in 

their testimony. Mr. Kane suggested an additional educational 

module on what the startup process looks like. 

Dr. Popescu suggested some one-on-one time with teams and instructors to address challenges unique to each team. Mr. Blank recommended trying I–Corps training—tying I–Corps training SBIR 

grants. Dr. Mazar talked about the need of a larger grants to support proof of concept activities. So, Dr. Peterson, Mr. Blank I’d like 

to get your thoughts on some of these suggestions. I’ll start with 

Dr. Peterson. 

Dr. PETERSON. Thank you, Congressman Lipinski. Let me first of 

all begin by reminding everyone that the I–Corps is just barely one 

year old. I think, as with any program, it’s very important to care-
76 

fully analyze how the program is going, not make drastic changes 

in a short period of time. 

Very carefully we learn the lessons that we can on the investments that we’re making. I think one of the key lessons that we 

have learned, as has been pointed out, both from your comments 

and the comments from others around this table, that the key element of the Innovation Corps program is education. It is the entrepreneurial education, innovation education, that is to be provided 

to students and the faculty to help them in this process and innovation. And what we found, really, is that in this first year the education component has in effect become the great learning step. We 

have outstanding ideas that are available from NSF grantees, both 

current and former. Providing the education components, components that Steve Blank has talked about, has been the great learning step. 

So, the first thing that we are going to focus on is expanding our 

ability to provide those education components in other geographical 

locations. NSF just recently made awards to both the University of 

Michigan and Georgia Tech to do so. In this next year we will try 

to expand to other universities. So, I would say, if there are other 

changes that may take place within the I–Corps next year, the primary focus at this point, is to expand the education component. 

Chairman BROOKS. I’m going to interject just for a moment. I’ve 

been requested to ask everyone, including the Members, to make 

sure that their microphone is on and that it is close to their 

mouths, because it is being recorded, and it will assist with that 

sound recording. 

Mr. BLANK. Thank you, Congressman Lipinski. You know, I 

think that’s a great question, what can we do with more, and what 

we will do more with less. I think that’s the role of government in 

the coming years in this budget. And I think, again, if you think 

about where the I–Corps sits, it’s basic research, research that’s 

looking to be commercialized. And on the other side, SBIR, SDAT, 

our funds and private capital. 

And what the I–Corps is for me, is we now know something we 

didn’t know ten years ago, didn’t even know five years ago. And 

what we now know, and combined and embedded in this program, 

is how to make these startups sufficient. That is, how do we not 

give them tens, or hundreds of millions of dollars before they even 

know what is it they’re doing. And that’s the core of the program. 

I believe that every basic research organization in the United 

States, not just the NSF; ARPA-E, DOE, NIH, all of them have an 

I–Corps program, and that would be the best use of taxpayer 

money, instead of just writing blank checks. I think having an efficient education program, because, for me, this isn’t a funding program, this is an education program that actually helps scientists 

themselves discover whether this is a viable business. So, instead 

of coming to Congress or private capital with their hand out, 

they’re now coming with customers. And that’s the first time we actually know how to do this. 

And so, my first request to Congress, if I had a wish list, would 

be, we’ve got to think about expanding this past NSF, in front of 

every resource or organization that’s running SBIR and STTR programs. We’d make them incredibly efficient for just a ridiculously 
77 

small amount of money, because it’s an education program, not a 

funding program. 

Mr. LIPINSKI. Anything else anyone wants to add on that? Okay. 

I think I’ll—with that, I’ll yield back, and I—we’ll come back with 

more questions. Thank you. 

Chairman BROOKS. Thank you, Mr. Lipinski. I want to cover 

some of the background that Congress is dealing with right now, 

financial climate of the United States of America. You all probably 

have a feel for this, but I’m going to give you some specifics. We’re 

looking at a 1.4-trillion-dollar deficit, followed by a 1.3-trillion-dollar deficit, followed by a 1.3-trillion-dollar deficit. This fiscal year 

we blew through the one trillion dollar mark in the last week or 

so, and we still have two and a half months to go. Last November 

we blew through the 15-trillion-dollar debt mark; sometime this 

year we’re going to blow through the 16-trillion-dollar debt mark. 

The cost to service America’s debt from FY 2010, to FY 2011, went 

up 25 billion dollars a year. From 196 billion to 221 billion. Now, 

what’s 25 billion dollars? 

That is more than the entire NASA budget. Okay? So, that 

amount of money is in perpetuity now is being spent on servicing 

our creditors, instead of giving some kind of return for taxpayers 

who are losing that money to the federal government, in hopes of 

getting some kind of service back in return. 

You’ve seen what’s happened in Spain, Italy and Greece, where 

their interest rates are significantly higher. They’re on a downward 

spiral, trying desperately to avoid an insolvency and bankruptcy of 

their nations. But for the bailouts by other nations in the European 

community, they would have gone into insolvency and bankruptcy. 

What does that mean? Well, their unemployment rates generally 

are in the neighborhood of 20 percent, those three nations on average. Two of them are higher, one of them is lower. 

Now, think about that, the impact on the Unites States of America, if we follow that same path. So, Congress is working hard to 

try to determine ways to avoid a federal government insolvency 

and bankruptcy. For emphasis, if we have a federal government insolvency and bankruptcy, you might see zero money for National 

Defense; you might see zero money for the NSF; you might see zero 

money for Social Security; you might see zero money for Medicaid 

and Medicare. Think of the federal government program, there 

might be zero for it. 

Right now, thirty-six cents on every dollar that the federal government spends is borrowed. No business, as I’m sure Mr. Kane. 

Since he’s in that field, knows, no business can last very long when 

their operational cost, 36 cents on the dollar is borrowed. Okay? 

And while I wish I could say that things are getting better, they’re 

not. The hole just keeps getting deeper and deeper as evidenced by 

our, again, having another trillion-dollar deficit for this fiscal year. 

And, surprisingly, in the atmosphere in Washington, about how, 

you know, there are cuts, I’m sure you’ve seen about it in the 

media, in the context of those cuts, yes, there have been some cuts 

to some programs. But in the fiscal year that ended September 

30th of last year, actual federal government spending went up well 

over 100 billion dollars. So, when Washington talks about cuts, it’s 

not like we understand the words, net; Washington is talking about 
78 

picking a little cut there, picking a little cut there, but nonetheless, 

the overall spending is still ballooning. 

So, what we have to do, what I desire from you all as much as 

possible, is information that will help me determine why spending 

has to be cut in order to save our federal government from an insolvency and bankruptcy. Now, I have a background in economics, 

and, to me, the insolvency and bankruptcy, if we continue on the 

path that we’re on, is inevitable. It is an absolute certainty. The 

only question is when. Now, if we get off that path and we get off 

quick enough, then maybe we can save our country from insolvency 

and bankruptcy. 

And to kind of put it into perspective, and I know when I talk 

these big numbers sometimes people kind of get their eyes glazed 

over, but think the Great Depression. Think 15 and 20 percent unemployment. Then think about having a federal government that 

is not solvent and can’t pay any bills. In the Great Depression we 

had a government that was solvent. Albeit it was difficult times, 

they at least could pay their bills. And when World War II broke 

out, the federal government was in a position to help defend our 

country, not on one front, but two fronts. 

So, that having been said, I’m going to start asking some questions about the I–Corps program. For those of you who are not 

aware, each team picked to participate in the I–Corps program gets 

$50,000. In 2011 there were 46 teams, only 2.3 million dollars out 

of all the trillions of dollars being spent by the federal government. 

In 2012, the year we’re now in, a hundred teams will be picked, 

at a cost of five million. The projection for 2013, according to some 

of the testimony I received, is 250. So, over a two-year period, 

you’re talking about, roughly, a five-fold increase in spending, and 

the number of teams that will be selected to participate in the I– 

Corps program. 

Very basic question. Where does the $50,000 go? Anyone who 

wants to answer feel free. 

And just as an aside, these mikes seem to be the opposite of 

those mikes. Those mikes you push down, and it’s on. This one, if 

you push down, you’ve turned it off. Okay. So, when the button is 

up, that’s when it’s on. So, who would like to make a stab now on 

the fifty thousands. 

Dr. PETERSON. Chairman Brooks. Let me begin—is this—— 

Chairman BROOKS. You just turned your mic off. There you go, 

now it’s on. 

Dr. PETERSON. All right. 

Chairman BROOKS. There you go, now you can answer. 

Dr. PETERSON. I will just give a very simple answer and let my 

colleagues elaborate, perhaps with very specific examples. The 

$50,000 is to provide the additional support for the already funded 

NSF researchers, or previously funded NSF researchers, to either 

develop a proof of concept or a prototype for their particular idea. 

It’s not meant to replace venture capital or anything like that, but 

to provide a modest amount of support where they can develop 

their proof of concept or prototype. 

Chairman BROOKS. Well, more specifically, as I understand, 

6,000 goes to education; right? 
79 

Dr. PETERSON. There is a component that’s associated with the 

indirects from the university and the components associated with 

providing the educational part of the I–Corps, yes. So, it does provide support for those teams who are participating in the educational component. 

Chairman BROOKS. And is it roughly $6,000? 

Dr. PETERSON. I believe that’s correct, yes. 

Chairman BROOKS. Who gets that money; the universities or 

somebody else, the 6,000. 

Dr. PETERSON. That money is used to pay for the educational 

component, the curriculum that’s provided for the I–Corps program. There is an intense one-week course, in addition to the longterm course, that’s associated with I–Corps and it’s meant to provide the support for that. 

Chairman BROOKS. Specifically, who gets the money? Do you pay 

the instructors for teaching the I–Corps course, or are you talking 

about the $6,000 is being used to print the document, or whatever 

constitute the curriculum, where does the 6,000 actually go. 

Dr. PETERSON. It’s to provide the support for the instructors, yes, 

sir. 

Chairman BROOKS. Well, when you say, ‘‘support for the instructors’’, what do you mean. 

Dr. PETERSON. Well, Congressman, could I provide specific details for you, for the record? I don’t have the exact numbers for exactly how every dollar in that educational investment goes, so I’d 

be happy to provide that for you. 

Chairman BROOKS. Okay. Can anyone help illuminate on where 

the 6,000—who actually receives the six grand. 

Mr. BLANK. So, Congressman, I absolutely could tell you it’s not 

me. The good news is for the first two cohorts, every one of the instructors volunteer for their time. And I mean every one of them. 

Not only me. We’re talking about venture capitalists who have fulltime jobs, who I convinced to teach in this program by themselves. 

And in addition, at least, if I understood correctly, National Science 

Foundation raised over a million dollars in private capital, not from 

the Kaplan Foundation—— 

Chairman BROOKS. Okay. I appreciate you going off on the private capital part, Mr. Blank. But right now I’m just trying to figure 

out where the $50,000 goes, that the federal government provides. 

Mr. BLANK. Right. I think we—— 

Chairman BROOKS. I mean, it’s a basic question. 

Mr. BLANK. Since I’m not part of the NSF, I think we should 

have some of the staffers here, who could probably answer that 

one. 

Chairman BROOKS. Well, we’ve got 44,000 that roughly goes to 

things that are not educational. From what I understand, travel expense would be one; is that correct. 

Dr. POPESCU. Yes. 

Chairman BROOKS. Building and prototype would be another. 

Dr. POPESCU. Yes. For probably us, as a PI—— 

Chairman BROOKS. You got the money. 

Dr. POPESCU. Yes. 

Chairman BROOKS. What did you do with that. 
80 

Dr. POPESCU. So, we have to—the three members of our team 

have to pay the tuition educational component, and then we have 

to pay for the entrepreneurial’s efforts, and for the business mentor’s consulting efforts. And in terms of, as it was mentioned, we 

wanted to design the first viable product that would come out of 

the lab. 

Chairman BROOKS. So, Mr. Blank perhaps you could help. Well, 

if any of you all could help. It sounds like the 50,000 goes to things 

that would normally be, if you’re starting a business, the startup 

cost of that business, and the people who are owning that business 

would be the ones that would front that money; is that a fair statement? With the exception of the 6,000 for education. 

Dr. POPESCU. Let me offer this. I don’t think that’s accurate, we 

haven’t started receiving the private funds yet, but—so, in addition 

to the condition that they’re—the cost of the trips, everything is 

about, to us, it is about $8,000 per person for the trips and in our 

capacity. 

And the rest is just, as I mentioned, the effort of my team. And, 

you know, I don’t think this qualifies as a good placement for it. 

Chairman BROOKS. Well, I’ll take Dr. Peterson up on the offer, 

and Mr. Blank up on the offer, the offer to submit to me an 

itemization of how the money normally is spent, who actually receives it, that would be beneficial. At this time, I’m going to send 

the microphone back to Mr. Lipinski for additional Q and A. 

Mr. LIPINSKI. Thank you, Chairman Brooks. And I agree, certainly, with all the issues with the federal budget deficit and our 

debt. I recently attended a meeting with a bipartisan group of 

members of the Committee for Responsible Federal Budget, and 

the CEO of Honeywell talked about we have somewhere between 

six and three years—no one knows exactly how long— before we 

do something serious to show that we’re serious about reducing the 

deficit. So, I am very hopeful. And I think it is an important question, about where exactly the money goes to for I–Corps. But I also 

think we have to look at the rewards we get for this, we have to 

go through everything in the federal budget and figure out, what 

do we get for the money that we’re spending here. 

I want to talk a little bit; hear from the witnesses more about 

the entrepreneurial education and the leveraging of this from I– 

Corps. But just in general, especially Mr. Mazar. What can be done 

in terms of teaching those who are in the lab? I mean, I was a political science professor, assistant professor, but I also have a background in engineering. And I’d be one of the first people to say that 

this is not something, entrepreneurship turning research into a 

product, is something with some of the hard sciences that engineers—not something that they necessarily have an idea of how to 

do. Also, I know social science also has some recipients of I–Corps 

funding—they also had some very good idea. 

But, how have you seen—anyone on the panel— the kind of the 

leveraging of the information coming from the I–Corps program, 

how have you seen that have an impact, especially Dr. Popescu, 

but anyone else, how is it that that helped sort of to bring a new 

sort of information and entrepreneurial spirit and knowledge to beyond what you have learned with I–Corps. 
81 

Dr. POPESCU. Okay. Thank you very much for the question. For 

me, the main benefit for—I would say the first benefit was to kind 

of clarify the message of our technology. If you remember, still remember our first presentation of the I–Corps was kind of, we were 

explaining our technology in terms of what it could do, very technical terms. It could do 3D imaging and nanoscale resolutions and 

all that. And then we were told that, ‘‘Hold on, the customers, they 

want to hear the value proposition.’’ So, the first benefit was that 

now in our business proposal we have this very clearly stated. And 

we started to have—we have recently given the local investors, 

where this message was very sharp and very well received. And 

we’re very confident that we will raise our $400,000 in a couple of 

months. We’re very confident about that. So, I would say that’s one 

thing, but we learned, basically, a whole lot from the startup program. 

Mr. LIPINSKI. Mr. Kane? 

Mr. KANE. Thank you. Let me state for the record that at the 

time the decision was made to apply for I–Corps, it was a university project and there was no presumption or commitment to start 

a new company. So, all of the efforts that you would typically expect one to make, in the investment of time and resources that people would make into getting a startup off the ground, really wasn’t 

a consideration at the time that we decided to apply for I–Corps. 

It was only after going through I–Corps that we got the confirmation to suggest that we should start a company. 

But, Congressman Lipinski, to address your question specifically 

about the leverage, I’ll talk briefly about my own personal experience. As you know, I do a lot of advisory work, consulting, and even 

though I’m the CEO of GlucoSentient, I also am involved in several 

other startups. 

And since the time that I went through I–Corps and first got exposed to Steve’s curriculum in the lectures at Stanford last October, since then I have spoken at the University of Illinois, at Northwestern, at Notre Dame. We had a group of MBA students from 

Kellogg who were assigned, as a semester-long project, to assist the 

Northwestern startup that I’m working on, to do some market development and characterization of the opportunity. And I actually 

encouraged them and brought the business model generation techniques that I learned in Steve’s class at Stanford to this project at 

Kellogg. They went out and bought the textbook and read it, and 

now some of that methodology is being infused there. 

So, over time, I mean, I’m just the data point of one, but now 

that I’ve been exposed to the curriculum, and then you multiply my 

efforts by the dozens and soon hundreds of other mentors who have 

gone through the program, we’re out in the community, at the business schools, at the engineering schools, helping to diffuse that 

knowledge. And I think over time you’re going to see an exponential gain as that starts to accure. 

Mr. BLANK. And if I can, Congressman Lipinski, since I designed 

the course to do this on purpose, let me assure you and Chairman 

Brooks that the goal was shock and awe for the students who went 

through it. And I think they could all tell you that they were certainly changed from the first day of that class. And given their experience and their stature, I don’t think anybody spoke to them 
82 

like that in the last 20 years. And they certainly learned about 

what was important in the shortest period of time. And more importantly, for the country, I think we changed them forever. I think 

we made them incredibly efficient. Now, I think Chairman Brooks’ issue about the $50,000, while, 

relevant, this is not funding for the startup. I think, as Mr. Kane 

said, they don’t come in thinking they’re going to build a company, 

they come in thinking, How can I commercialize this? And all of 

a sudden when they leave, they now understand what it takes to 

build a company, with no doubt. I think this was the—probably the 

shortest period of emersion we could get a team with the biggest 

bang for the buck. And I think we did a pretty good job of it, and 

I’m pretty proud that we’re going to continue to do this. 

The other comment I should make for the Committee, is you 

should understand that this process is being adopted in Silicon Valley, literally, by qualifier. And the thing that concerns me, it’s not 

just Silicon Valley, this process has been being conducted for a 

while. You know, commercialization and research is going to go 

ahead, whether we decide to join it or not. It’s one of those great 

adventures of our time. And I just kind of believe that this country 

wants to be the leader of other nations. We can’t be left behind 

here. Because I hope the fruits of all these investments, and all 

this research that this Committee has been helping fund for these 

decades, I hope we see those products printed in English and not 

in Chinese. Because this technology and this course, this educational process, can be adopted elsewhere. It’s the one thing we 

know how to do in the United States, which is fail fast, and fail 

quickly, and test our hypothesis, that make this unique here. We 

fail to capitalize on that, how we literally will be seeing these products not made in Shanghai and Beijing. And that just bothers me 

as an American. 

Mr. LIPINSKI. Before I let Dr. Mazar address this, I want to say, 

having spent some time in the ivory towers, at the universities, I 

know in my own, in just looking at my experiences in political 

science, I saw some great research being done. And my question always was, ‘‘So what?’’ I come from a very practical midwestern 

background, and that was always my question, ‘‘So what?’’ I want 

to know what the application is here? 

And I think this has relevance in that there’s a lot of great work 

that’s being done and getting—Dr. Popescu said, ‘‘What’s the value 

proposition?’’ I think if you spend your time doing a lot of research, 

you can come up with all kinds of great discoveries, great findings. 

But, you cannot—it might be, at some point, applicable to starting, 

to creating a new product. Starting a new company. 

But you’re not challenged as a researcher to think about that, 

really, in the normal process of what goes on at universities. And 

trying to get tenure, working on research, and publishing, and I 

think that is something that we need to do more of here in this 

country. 

And I want to ask Dr. Mazar how Northwestern is doing that, 

and how you may see others doing that. We have a lot of—now it 

seems like it has become very popular in the last decade or two, 

to have some kind of center or institute, some kind of program at 

universities to focus on technology transfer. And I think this is 
83 

something very new and something that’s really critically important for, as I said, innovation and jobs in this country. So, how do 

you see that? How do you see the whole mindset is changing? 

I’ll tell you, I sat in on a class that Mr. Blank had for graduate 

students. Not the I–Corps class, but teaching Lean LaunchPad to 

graduate students. I was a Stanford graduate student 20 years ago. 

I didn’t know graduate students who were thinking like this. There 

is a whole different mindset there, at least at Stanford, hopefully 

at other schools, of entrepreneurship and coming up with these 

ideas. It was almost shocking to me, in a very good way, that I saw 

these graduate students—like my colleagues, I was not thinking 

like that when I was at Stanford 20 something years ago. I didn’t 

know anyone who was thinking like that. So, it’s a whole different 

change of mindset among people who are doing research. 

So, with that, Dr. Mazar, what are you doing at Northwestern, 

and how do you see the—sort of the mindset changing of people 

who are doing the research, in terms of the possibilities when they 

do have something that could possibly become an innovation? 

Dr. MAZAR. So, thank you, Congressman. I’ll try and keep my 

comments brief since that’s blinking a lot right now. Seems to be 

angrier everysecond for some reason. 

Mr. LIPINSKI. Don’t worry. 

Dr. MAZAR. So, Northwestern, I think, in observing over the past 

several years just the culturalship, the way everybody started, the 

students all way through faculty, through administration and senior leadership, is viewing entrepreneurship as well in the university. And I think Northwestern has been forward-looking in that 

way, by allowing to have it organic. There’s a lot of programs for 

students and faculty that are adaptive programs. There’s, for example, the Fawn Center For Entrepreneurship, where, in this case, 

actually bred into the neotype of the students, graduate students 

and even undergraduates, very early on in their approach to pursue their ideas and think about how to commercialize and go out 

in the competition, write business plans. There’s lot of support for 

that. And a lot of that is coming from, I’d say, two big sources; one 

being the Innovation New Venture Office, which is sort of the next 

generation tech transfer, but much, much more at Northwestern. 

The transfer function is just one little part of that. But they are 

the ones that are really pushing a lot of these adaptive programs, 

but also pushing hands-on training side by side with mentors and 

entrepreneurs. And so, that’s sort of how I came to be here, is because I could sit down with faculty, and we’ll just talk about theory, or you should do this, you should do that. But I actually rolled 

up my sleeves and I rode with them side by side and take their 

therapeutic ideas, and moved them forward toward the clinical, towards commercialization. And I think that most faculty have 

worked in sort of medically-related research. 

If you talk to most people, they say, ‘‘Man, I’d really like to 

translate my idea into a drug, but I don’t know how to do it.’’ So, 

as soon as you sit down with them and show them how to do it, 

that process just begins to flow and occur naturally. And so, consequently, a lot of these projects now, that sort of used to stop at 

what I call the power one stage. So, once you write your papers, 

what do you do next? Well, in most universities here of late, you 
84 

send that to a transfer office. Here we’re now trying to take those 

projects and advance them further, so we can get them out the 

door, out into pharmaceutical companies or partnership, or 

startups or spin-offs, so we’re immediately commercializing, generating revenues to the University. 

And so, I think, to me, that cultural shift, and also just having 

people within the University who have been there, done that, who 

have that expertise, that will work side by side with faculty, has 

been sort of the biggest change that I’ve seen that’s helped a lot 

of these things move forward. 

Mr. LIPINSKI. Thank you. And I have to thank the Chairman 

very much for all the extra time. When I was at Stanford, I was 

in the Engineering Economics Systems Program there, which is 

now Management of Science of Engineering, to see students who 

are in that same program coming to that class, and have these 

ideas. It’s great to see that and I think we need to have more of 

that across this country for the future of our country. Thank you. 

Chairman BROOKS. I’m going to try to reduce this to a general 

sense again. We basically have three kinds of expenditures in 

Washington D.C., one is interest on the debt. We have no choice 

but to pay it. If we don’t pay it, our creditors charge us a lot more, 

or they can cut us off. If they cut us off, all of a sudden you have 

to have a 36-cent-on-the-dollar reduction federal spending across 

the board. But that’s one place. The second place is the entitlement 

programs. That’s where the big boom is, over a hundred-billion-dollar increase in spending for Social Security, Medicaid, Medicare, 

wealth transfer programs, a variety of different stewards. And then 

we’ve got the third pot of money, which is where NSF comes from, 

which is where National Defense comes from, and that’s discretionary spending. That is the one area of the federal government 

where spending has actually been cut. And so, what I’m looking for 

is information that would help me protect this program as opposed 

to others that are being cut. I use National Defense as an example. 

With sequestration, if it comes to fruition, and it’s scheduled to for 

January 1st of 2013, you’re looking at 700,000 layoffs. Seven hundred thousand layoffs. And the DOD said that it was court workers, uniform defense personnel, or private sector support contractors. A reduction in our National Defense capabilities of approximately 25 percent, according to Committee estimates. House 

Armed Services Committee estimates. So, you’re seeing great competition for the dollars that we have. And even with that competition, we’re not reducing spending enough to adequately reduce the 

risk of insolvency and bankruptcy. 

I note, and I really appreciate Mr. Lipinski reducing it to fewer 

words than I could have. He said, ‘‘So what?’’ And that’s really the 

gist of it. For us to be successful in defending this type of program, 

we have to be able to show results. 

And I’m going to just read a few of the comments of some of the 

witnesses from our witness statements. Dr. Peterson said, ‘‘Initial 

anecdotal indicators suggest that the I–Corps program has been a 

significant, positive addition to the NSF investment portfolio, even 

though it constitutes less than one-third of one percent of the NSF 

budget.’’ 
85 

Now, we have another comment by—this one’s Mr. Blank. The I– 

Corps program, quote, ‘‘will pay us back with jobs and a competitive edge on a global scale,’’ end quote. 

Then we have another quote by Mr. Kane, which is closer to the 

‘‘So what’’ comment, but it’s pretty much where I am. Quote, ‘‘As 

an entrepreneur I see things through a different lens. In my world 

view, technologies have limited value unless they are applied. And 

for jobs to be created and the tax base to go up, somebody eventually needs to make a profit,’’ end quote. 

I’m looking at the teams, our efforts that we’ve engaged in so far, 

were 46 in 2011, 100 in 2012, and 250 projected for 2013. I know 

we can’t do anything about 2013, because that’s projection. Probably can’t do anything about 2012, because that’s also just in an 

embryonic stage. But with respect to the 46 I–Corps teams that 

were set up to market products to start up a business, how many 

of those 46 are today profitable and self-sufficient, i.e., they’re receiving no federal government or other taxpayer funds. 

Dr. PETERSON. Chairman Brooks, if I could begin first of all, and 

then I’ll ask Steve Blank to comment more specifically. I think it’s 

very important to be realistic about what we can expect in a specific amount of time for this program. Absolutely all the things that 

we need to develop with new jobs, new companies, all of these we 

hope and have every expectation that this program will do, and if 

it doesn’t do more things we shouldn’t be investing in it. We’ve 

never promised that in one year, that all of a sudden there’s going 

to be thousands of new jobs, or every single investment in the I– 

Corps program turns out to be a successful company. But as has 

been pointed out, this is a key investment in development of innovation, and I think without that step we can’t anticipate the future, 

future developments,—— 

Chairman BROOKS. And, Mr. Peterson, if I could interject for a 

moment. You’re answering my next question, I haven’t asked it yet, 

but it was going to be why. My first question is: How many of the 

46 are stand-alone, profitable, self-sufficient, without taxpayer subsidy—— 

Mr. LIPINSKI. Could anyone—— 

Chairman BROOKS. —or assistance. 

Mr. LIPINSKI. Can anyone talk about any progress, anything—— 

Mr. BLANK. Yeah. So,—— 

Mr. LIPINSKI. —that looks potentially—— 

Mr. BLANK. So, let me ask—try to answer Congressman Brooks’ 

direct question by saying, I think it’s a divide by zero question. 

Which I mean is, it implicitly says that the goal was to set up a 

series of profitable companies, is the outcome of the I–Corps program. Which, that wasn’t the program I was teaching. 

Chairman BROOKS. That’s not, the goal is not to establish—— 

Mr. BLANK. So,—— 

Chairman BROOKS. —startup companies, that are successful—— 

Mr. BLANK. The goal for what I was teaching was to understand 

whether these entities were capable of being startup companies. 

And, in fact, the viable answer for $50,000, which is probably the 

cheapest investment the government will make, is to find out, no, 

let’s not spend or raise millions of dollars, that, gee, there is no 

market for this. So, number one is, is this a go or no-go decision. 
86 

Number two is, are these technically add business viable enough 

to actually apply for an SBIR Phase I grant. Or, two is, is it possible that these entities could go out and become companies and 

raise private capital. And the key idea is, Chairman Brooks, I know 

you’re familiar with NASA’s technology readiness level, when they 

take a look at technology and say, ‘‘Is it ready?’’ We’ve never had 

a business readiness level anywhere in this country. What this program does is not build companies—— 

Chairman BROOKS. Mr. Blank, I’m going to have to interject 

again. Can anyone answer my question as to whether any of the 

46 are profitable, stand-alone, don’t-need-government assistance? 

Any of the 46? 

Mr. BLANK. I don’t know, but I don’t think that was the goal. 

Chairman BROOKS. Well, that—I’m not asking you what you 

thought the goal was. 

Mr. BLANK. I have no idea. 

Chairman BROOKS. I’m asking, again, if anyone can answer the 

question as to whether any of the 46 of these startups have been 

successful? 

Dr. PETERSON. Okay. I—— 

Chairman BROOKS. And I’ll get to Mr. Peterson, he’s answering— 

asking—he was answering my second question, which I haven’t 

asked yet. But right now the question stands, does anyone know 

of any of the 46 that are making a profit and are successful in the 

business environment. 

Dr. PETERSON. Chairman Brooks, you understand my reticence 

just to directly give you a yes-or-no answer, simply because I don’t 

necessarily agree that if they aren’t stand-alone companies, that 

they haven’t been successful. My guess is, and we’ll look, and 

again, we’ll get exactly these numbers for you, but very few of the 

investments are now totally self-sufficient, stand-alone, profitable 

companies. That was not an expectation in one year’s investment 

from the I–Corps program. We will get you that specific information. 

Chairman BROOKS. All right. Well, until I get something to the 

contrary, I’m going to infer from the silence, or the answering different questions, that there are no known profitable businesses so 

far of the 46. 

My second question, which, Mr. Peterson, you were focusing on 

in advance of having—of me receiving an answer to the first one 

was, why not? And if I can now summarize, the why not is because 

it’s premature, and also because of Mr. Blank’s comment, that it 

really wasn’t the goal of the I–Corps program. And, Mr. Kane, you 

have something to add. 

Mr. KANE. I would just add that the earliest time that anybody 

could have started a company, if they had gone through the first 

I–Corps, would have been January of this year. So, the question 

you’re asking is whether any companies that got started from a 

standing start, in seven months are profitable. 

Chairman BROOKS. Well, my third question is going to be: At 

what point in time should we be in a position where we can properly evaluate the startup numbers? And I’m looking at a quote 

from Dr. Peterson’s written testimony, ‘‘Specifically, the Priority 

Goal states that by September 30th, 2013, 80 percent of teams par-
87 

ticipating in the Innovation Corps program will have tested the 

commercial viability of their product or service.’’ So, is 2013 when 

we should, as a Committee, start being in a position where we can 

sincerely evaluate at least the 46 startups from 2011? 

Dr. PETERSON. I think the answer to that is yes. That is exactly 

what we’re stating. Then we will be able to test the viability. That 

does not say, and I’m going to make it very clear, we are not saying 

that 80 percent of all of the I–Corps investments will end up being 

profitable companies. But we will be able answer that question. 

Chairman BROOKS. And let me move to another part of Mr. 

Blank’s testimony. And I thought this was an interesting comment 

interposed, and the rest of his remarks. Quote, It’s why Silicon Valley investors fund startups when over 90 percent of startups fail, 

end quote. Is it your anticipation that with the I–Corps program, 

that kind of success rate is what we can expect, ten percent success, 90 percent failure. 

Mr. BLANK. You know, Chairman Brooks, I think if anybody 

knew that, we’d be venture capitalists. I think the goal for me in 

building this course is to change the odds. I think we now know 

what makes startups fail. I think we now know how to make them 

fail less. I think we now know how to make them spend a lot less 

of government and taxpayers’ money by finding these things out up 

front. I would hope that we actually look at the data. And the preliminary data, I think tells us a quite a bit, that we’re actually 

achieving that goal. I think your question about how should we 

measure this for the next couple of years is exactly what we should 

be doing. And I think, as I said, the data we see now gives us great 

comfort that we’re actually using taxpayers’ money incredibly efficiently. And so, yeah, I think we should see better numbers from 

that. Because of what we’re doing here is an education program, 

we’re teaching them to be parsimonious with their time, their energy, and more importantly, our money. 

Chairman BROOKS. Did anyone else want to add anything to 

what Mr. Blank has just stated? Otherwise I’ll go to my final comment, question, before we go back to Mr. Lipinski, on the chance 

that he wants to go another round. 

Mr. KANE. Chairman, if I could add something, perhaps, on your 

opening statement, where you said that as a congressman you’re 

trying to figure out how we reduce the budget deficit and where the 

cuts are going to be made, and as a citizen I have the same concern, although I haven’t been elected to solve the problem. But, we 

understand that debt is a difficult problem. And my suggestion, to 

be brief, is that entitlements is what you should look at. Because 

if I look at my own personal household, once I made the decision 

to become self-employed, I realized that there was certain freedom 

once I knew that I had an opportunity to sell my services and could 

be assured of making a living on my own. And I think that the only 

way to reduce the entitlement’s burden over time is to create 

wealth. And there’s no faster or better or more effective way to do 

that in the United States than through entrepreneurship. 

So, my closing statement is just a big flag waving need for the 

necessity of teaching entrepreneurship. It’s not a problem that’s 

going to get solved in a year, probably not even five years. We all 

know there’s no silver bullet. But over time, creating wealth by 
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training people how to be self-sufficient is the thing, in my humble 

opinion, that will eventually reduce the entitlement’s burden, 

which is one of the solutions to solving the debt problem. 

Chairman BROOKS. Well, Mr. Kane, I don’t know whose congressional district you live in, but if you’re saying focus only entitlements, the wealth-transfer programs, that we can invest in things 

that produce jobs, I would encourage you to consider an application 

for Congress. Because we need people to work on—— 

Mr. LIPINSKI. If he doesn’t live in my district, that’s fine. 

Chairman BROOKS. Let me move on. My test for the I–Corps program is a different test than I would apply for most National 

Science Foundation work. When you’re doing basic research, you 

don’t know what you’re going to come up with, you don’t know 

what the end result is going to be, you’re trying to expand the 

human mind. Okay? And just the expansion of the human mind, 

in and of itself, may be worth the taxpayer money that’s being 

spent on those research projects. 

But when you get to something like I–Corps, as I perceive it, 

granted this is my first term in office, but I’m more akin to the ‘‘so 

what’’ comment of Mr. Lipinski. We have to have results if we’re 

going to be able to justify this program long-term. And to me, the 

results are that we’re generating the kind of jobs and wealth that 

most of you guys have testified to in your written statements as 

being the end result of the I–Corps program. 

And so, I’ll be anxiously awaiting 2013 and 2014 voters willing 

in my district that I return to the United States Congress, and if 

we have significant improvement in the creation of businesses successfully, and the creation of jobs, then that enables us, or empowers us to be able to explain to our constituents back home that 

we’re being wise stewards of the taxpayers’ dollars. 

I will say that I’m very much concerned by the analogy, indirectly, not directly, to Silicon Valley, where venture capitalists are 

looking at a 90-percent failure rate and ten percent success rate. 

Well, we can expect 10-percent success rate out of them, because 

that’s their decision. Okay? If they want to do ten percent or five 

percent, or 10 or 30 or 40, it’s their money. Can’t question it. And 

if that’s what they are comfortable with, that’s fine, that’s meeting 

their expectation. But when you’re talking about taxpayer’s dollars, 

I’m not sure there are going to be very many Americans around the 

country that are satisfied with a 90-percent failure rate and a 10- 

percent success rate. 

Now, again, granted, we’re early in the program. Too early, quite 

frankly, to be able to make a thumbs up, thumbs down decision on 

it. But over the ensuing few years, I hope that you all’s involvement in it, you all will do what you all can to try to make sure 

that we have a good success rate, that in turn will translate into 

our ability to defend this program as opposed to defending another 

program that is able to project a better return on taxpayers’ dollars. 

With that having been said, Mr. Lipinski, if you’d like to make 

any more remarks, or if you want to follow up with more questions 

we still have time. 

Mr. LIPINSKI. Thank you, Mr. Chairman. I think that we have 

to consider why venture capitalists are willing to go in and put 
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their money on the line with only 90 percent failure rate. And 

that’s because what we should be looking at is not success or failure rate, but what do we wind up getting out of this. And I don’t 

think we should be looking at what percentage of these I–Corps 

grant recipients go on to actually create successful business. It’s 

what’s the end result, what is not percentage-wise how many succeed, but what do we get out of this. 

And if only one percent, if only one of them succeeds but succeeds in a big way, for example, then it’s worthwhile. 

And we can’t really measure, it’s difficult to measure the change, 

as Dr. Mazar was talking about. Just the change in thinking of the 

people who participated in this program, even if this idea that they 

have brought to I–Corps doesn’t work, doesn’t mean something will 

not work in the future, or maybe some of their colleagues learned 

better how to be entrepreneurial. So, it’s hard to measure the success. 

And I completely agree with you, Chairman Brooks, that we have 

to be careful about how we’re spending money. And I think that we 

have to be—have to watch and see what does happen with I–Corps 

and the money that we are—NSF is putting towards I–Corps and 

it’s important to have that oversight, as Congress does, and our 

Subcommittee is in charge of that oversight of NSF over on the 

House side. 

And I think that it’s crucial to do that, that’s why we wanted to 

hold this hearing, and I thank you for doing that. But I think if 

we are looking at a solution, and we say well we can’t have a 90- 

percent failure rate with the money that goes to I–Corps—that’s 

not really what we should be focusing on. 

It looks like Mr. Blank wants to jump in here. 

Mr. BLANK. I just want to maybe make a point for Chairman 

Brooks’ comment. Chairman Brooks, you’re from Huntsville, is that 

the district you represent? 

Chairman BROOKS. Yes, sir, home of the country’s second largest 

Research Park. 

Mr. BLANK. Right. And Saturn Five was developed there, wasn’t 

it, the institute? 

Chairman BROOKS. It certainly was. 

Mr. BLANK. And I seem to remember in the early days, in 1960s, 

when I was a young boy, I think that one had a failure rate, those 

things kept falling out all the time. Not only Saturn Five, but all 

the rockets. 

Chairman BROOKS. You must be older than me, my memory is 

we had it excellent—— 

Mr. BLANK. Not at the Center, but I remember the early red 

stones and the Jupiters, and the first grandparents all kind of blew 

up in the pan for the country. Understood. 

But, the cost of science and experimentation was failure, not— 

and that’s—again, we didn’t shoot our scientists when they failed. 

We don’t shoot our entrepreneurs, we embrace the fact, that this 

is what we do. 

And I understand you have to explain that to taxpayers. But, in 

fact, if we actually look at some of the labs that we fund, we don’t 

have a hundred percent success rate in these experiments. We 

don’t expect that. We understand that’s the nature of science. And 
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I know you understand that. And I want you to know that I understand. My personal goal is to increase this hit rate, but I just want 

it you to understand that, for me, entrepreneurship, on day one is 

a faith based. Faith based, call ’em. And very quickly we turn these 

into facts. And that’s what we use this process to do. And hopefully 

we can increase that rate to where we’re all proud of what it is. 

I just wanted to share those comments. 

Chairman BROOKS. Well, thank you for your comments. 

And I will make this distinction philosophically. It is one thing 

to be involved in basic science, which to some degree Saturn Five 

was with our effort to explore space, as it has been with nanotechnology and all of these other things that the National Science 

Foundation has been excellent at doing. And we understand that 

with basic science, there’s going to be a significant failure rate. It 

is another thing, though, for the federal government to go past the 

basic science and to start getting into the free enterprise system. 

As you probably are aware, in Washington we had a serious philosophical battle between socialism on the one hand, which gives an 

economic model that does not work. Korea would be the best example. And free enterprise on the other end. And to what degree does 

the federal government’s involvement help determine which of our 

entrepreneurs are going to be successful and which are going to 

fail, and to the extent the federal government is the determiner of 

who is successful and who fails, then you have politicians that are 

making those decisions, often for political allies as opposed to what 

should be a fair and impartial system, which is what you have with 

free enterprise. And so, I see a difference between basic research 

and the government, any government’s, involvement in free enterprise. Not withstanding that difference, I understand that government has a role in education, and to the extent this is an education 

program that does produce results, that is something that we certainly need to consider perhaps in a favorable light. But to me, 

what I want to try to get more than anything else, is an idea of 

the timetable we should look at before we seriously evaluate this 

program. Because we have that in 2013, 2014, we should be expecting some results that justify the federal government expenditures 

of funds. And I think Mr. Lipinski hit the nail on the head when 

he also talked about, it’s not just a success rate. You give us one 

Microsoft, with the thousands upon thousands of jobs that they create, we can overlook a whole lot of other efforts that were unsuccessful. 

And my staff is reminding me that you are on Mr. Lipinski’s 

time. For that, Mr. Lipinski, I hand it back to you. Thank you. 

Mr. LIPINSKI. Thank you, Mr. Chairman. And, well, if the voters 

return both of us to Congress, I look forward to taking a further 

look at this topic in the next Congress. I think that gets back to, 

and I think we agree for the most part, on what we’re talking 

about here. We want to be good stewards of the taxpayers’ dollars, 

and know that it’s their money that we’re talking about here. But 

I think that this program, we have to be looking at—I think one 

last thing I want to mention is, is that Mr. Blank continued to talk 

about SBIR. We spent how much—let me ask Dr. Peterson. How 

much of NSF money goes to SBIR? 
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Dr. PETERSON. As you know, Congressman, it’s a specific fraction 

of the research and related expenses. And with NSF, it’s about 

$140 million a year, that is what our SBIR budget is at this time. 

Mr. LIPINSKI. And, I think that this is a way of hopefully having 

better results coming out of SBIR—also across the federal government. Not just at the NSF, we could have this kind of program like 

I–Corps at other places. It could be a great feeder to SBIR, and 

then that money, which is more money than what’s being spent on 

I–Corps, that taxpayer money can be better spent and have a better likelihood of having good results, and really having successful 

companies come out of it. 

But, I want to conclude by thanking the witnesses for their testimony. I really think that this this program has great potential, and 

we need to keep watching what is happening in terms of results. 

Results are not always easy to see, but the potential for a great 

payoff, and I appreciate what Chairman Brooks said, if we have 

one Microsoft-type come out of this, then we can say that it’s been 

a success. Like every other program we need to keep looking at it. 

And I thank the Chairman for coming out here to Chicago and taking a look at the I–Corps program during this hearing, and where 

the program is going. But I think we have to keep on focusing on 

innovation, it is the way that our country is going to succeed. A 

way American people are going to be successful is through innovation. We already spent a lot amount of money on the research, and 

I’m very happy to hear Chairman Brooks talk about understanding 

what we receive out of spending on this basic research. I want to 

thank our witnesses and thank Chairman Brooks. 

Chairman BROOKS. I, too, would like to thank—well, first I’d like 

to thank the witnesses—oops, I did it, sorry. That’s what Dr. Peterson did, pushed it in, turns it off. Now it’s off, now it’s on. 

I want to thank the witnesses for participating in this hearing, 

particularly Mr. Blank for the extraordinary efforts you made to 

come here. I look forward to additional interaction with each of you 

as this program, process, works its way through the system as we 

continue to battle over funding in Washington. I can assure you of 

one thing, the intensity of the debate over what’s going to get funded and what is not is only going to get worse over the coming years 

because of the financial limitations of our country. I want to thank 

Mr. Lipinski for calling this hearing in Chicago, his hometown 

neighborhood. It also happens to be my wife’s neck of the woods, 

she was born in Evanston, just a little bit to the north of Northwestern. So, she’s enjoying herself while I’m in this hearing. The 

Members of the Subcommittee may have additional questions for 

any one of you. I would ask you to respond to those in writing. Of 

course, that includes any questions from the Committee staff. The 

record will remain open for two weeks for additional comments 

from Members. And with that, this—the witnesses are excused and 

this hearing is adjourned. 

[Whereupon, at 11:44 a.m. CST, the subcommittee was adjourned.] 

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